Classical

Financial Accounting - Financial Accounting MCQ

6:  
The cost of perpetual debt after tax is calculated as
A.
14843
B.
14843
C.
14843
D.
14843
 
 

Option: B

Explanation :

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7:  
Which of the following has the highest cost of capital?
A.

Loans

B.

Equity shares

C.

Bonds

D.

Preference shares

 
 

Option: B

Explanation :

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8:  
The overall capitalisation rate and the cost of debt remain constant for all degrees of financial leverage is advocated by
A.

Traditional Approach

B.

Net Income Approach

C.

Net operating Income Approach

D.

M-M Approach

 
 

Option: D

Explanation :

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9:  
Read the following statements
(i) "Working capital is the amount of funds necessary to cover the cost of operating the enterprise."
(ii) "Circulating capital means current assets of a company that are changed in the ordinary course of business from one form to another."
A.

(i) and (ii) both are correct.

B.

(i) and (ii) both are false.

C.

(i) is correct but (ii) is false.

D.

(i) is false but (ii) is correct.

 
 

Option: B

Explanation :

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10:  
The cost of debt capital is calculated on the basis of
A.

Net proceeds

B.

Annual Interest

C.

Capital

D.

Arumal Depreciation

 
 

Option: B

Explanation :

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